UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025

☐	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ______________

Commission File Number 001-41768

TRON INC.

(Exact name of registrant as specified in charter)

Nevada		32-0686534
(State or other jurisdiction		(IRS Employer
of incorporation or organization)		Identification No.)

941 W. Morse Blvd. Suite 100
Winter Park, FL		32789
(Address of principal executive offices)		(Zip Code)

(407) 230-8100

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of exchange on which registered
Common Stock, $.0001 par value per share		TRON		Nasdaq

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☐ YES ☒ NO

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ YES ☐ NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) ☐ YES ☒ NO

As of November 5, 2025, there were 257,115,400 shares of the registrant’s common stock outstanding.

FORM 10-Q TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	F-1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16

Item 4.	Controls and Procedures	16

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	17

Item 1A	Risk Factors	17

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17

Item 3	Defaults Upon Senior Securities	17

Item 4.	Mine Safety Disclosures	17

Item 5.	Other Information	17

Item 6.	Exhibits	17

SIGNATURES		18

Table of Contents

PART I - FINANCIAL INFORMATION

This Quarterly Report on Form 10-Q includes the consolidated accounts of Tron Inc. (formerly SRM Entertainment, Inc.), a Nevada corporation and its subsidiaries. References in this Report to “we”, “our”, “us” or the “Company” refer to Tron Inc. unless the context dictates otherwise.

FORWARD LOOKING STATEMENTS

Certain statements in this report, including information incorporated by reference, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements reflect current views about future events and financial performance based on certain assumptions. They include opinions, forecasts, intentions, plans, goals, projections, guidance, expectations, beliefs or other statements that are not statements of historical fact. Words such as “will,” “may,” “should,” “could,” “would,” “expects,” “plans,” “believes,” “anticipates,” “intends,” “estimates,” “approximates,” “predicts,” “forecasts,” “potential,” “continue,” or “projects,” or the negative or other variation of such words, and similar expressions may identify a statement as a forward-looking statement. Any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, our goals, strategies, focus and plans, and other characterizations of future events or circumstances, including statements expressing general optimism about future operating results and the development of our products, are forward-looking statements.

Although forward-looking statements in this Quarterly Report on Form 10-Q reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the heading “Risk Factors” below, as well as those discussed elsewhere in this Quarterly Report on Form 10-Q. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. We file reports with the Securities and Exchange Commission (“SEC”). The public can read and copy any materials we file with the SEC at the SEC’s website (www.sec.gov) which contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us.

We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Quarterly Report on Form 10-Q. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this Quarterly Report on Form 10-Q, which attempts to advise interested parties of the risks and factors that may affect our businesses, financial condition, results of operations and prospects.

Table of Contents

Item 1. Financial Statements

Tron Inc.

	Page

Consolidated Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024 (Audited)	F-2

Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited)	F-3

Consolidated Statements of Changes in Shareholders’ Equity (Deficit) for the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited)	F-4

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (Unaudited)	F-5

Notes to the Financial Statements (Unaudited)	F-6

F-1

Table of Contents

Tron Inc.

Consolidated Balance Sheets

As of September 30, 2025 and December 31, 2024

	September 30,		December 31,
	2025		2024
	(Unaudited)		(Audited)
Assets
Cash	$	10,603,681	$	1,352,373
Account receivable		531,303		794,158
Inventory		717,593		783,800
Prepaid expenses and deposits		667,493		488,746
Investment in Gameverse Interactive Corp		190,500		-
Other current assets		67,340		43,380
Total current assets		12,777,910		3,462,457

Intangible assets (net of amortization) – Related Party		2,579,592		2,796,567
Investment in digital assets – held in Treasury Wallet set up by an Affiliate		228,417,623		-
Right of Use asset (ROU)		735,905		-
Fixed assets, net of depreciation		89,627		48,279
Total assets	$	244,600,657	$	6,307,303

Liabilities
Accounts Payable	$	216,208	$	263,993
Accrued and other liabilities		418,706		252,359
Current portion of ROU liability		214,833		-
Secured loan from Related Party		-		500,000
Total Current Liabilities		849,747		1,016,352
Deferred tax liability		3,454,510		-
ROU liability		521,578		-
Total Liabilities		4,825,835		1,016,352

Shareholders’ Equity (Deficit)
Preferred stock, $0.0001 par value, 10,000,000 shares authorized
Preferred Stock Series A, no shares outstanding		-		-
Preferred Stock Series B, 100,000 shares outstanding		10		-
Preferred Stock Value		10		-
Common stock, $0.0001 par value, 1,000,000,000 shares authorized 257,115,400 and 15,956,477 issues and outstanding at September 30, 2025 and December 31, 2024, respectively		25,712		1,596
Additional paid-in capital		232,128,806		10,195,598
Accumulated earnings (deficit)		7,298,294		(5,697,241	)
Common Stock Payable		322,000		790,998
Total Shareholders’ Equity (Deficit)		239,774,822		5,290,951
Total Liabilities and Shareholders’ Equity (Deficit)	$	244,600,657	$	6,307,303

The accompanying notes are an integral part of these unaudited financial statements.

F-2

Table of Contents

Tron Inc.

Condensed Consolidated Statements of Operations

For the Three and Nine Months Ended September 30, 2025 and 2024

(Unaudited)

	2025			2024			2025			2024
	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024

Revenue
Sales	$	1,104,293		$	876,392		$	3,536,856		$	3,390,676
Cost of Sales		806,395			679,874			2,680,220			2,705,945
Gross profit		297,898			196,518			856,636			684,731

Operating expense
General and administrative expenses		954,646			1,328,851			2,904,962			4,058,546

Total operating expenses		954,646			1,328,851			2,904,962			4,058,546
Operating loss		(656,748	)		(1,132,333	)		(2,048,326	)		(3,373,815	)

Other income / (expense)
Unrealized gain on digital asset investment		13,959,967			-			16,114,038			-
Unrealized Income from digital assets		2,258,770			-			2,303,539			-
Interest income		71,497			12,377			96,822			22,884
Interest expense		(4,710	)		(8,916	)		(16,028	)		(8,916	)
Total other income (expense)		16,285,524			3,461			18,498,371			13,968

Income (loss) before income tax	$	15,628,776		$	(1,128,872	)	$	16,450,045		$	(3,359,847	)
Provision for Income tax
Current		-			-			-			-
Deferred		3,454,510			-			3,454,510			-
Net Income (loss)	$	12,174,266		$	(1,128,872	)	$	12,995,535		$	(3,359,847	)

Net (loss) per share:
Basic	$	0.11		$	(0.11	)	$	0.27		$	(0.32	)
Fully diluted	$	0.04		$	(0.11	)	$	0.05		$	(0.32	)

Weighted average number of shares
Basic		110,045,018			10,581,558			48,948,051			10,389,770
Fully diluted		317,763,232			10,581,558			256,666,265			10,389,770

The accompanying notes are an integral part of these unaudited financial statements.

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Tron Inc.

Condensed Consolidated Statements of Changes in Shareholders’ Equity (Deficit)

For the Three and Nine Months Ended September 30, 2025 and 2024

	Shares			Amount		Shares		Amount		Shares		Amount		Payable			Capital			Deficits			Total
	Series A					Series B								Common			Additional
	Preferred Stock					Preferred Stock				Common Stock				Stock			Paid-In			Accumulated
	Shares			Amount		Shares		Amount		Shares		Amount		Payable			Capital			Deficits			Total

Balance, December 31,2023		-		$	-		-	$	-		9,765,000	$	977	$	676,000		$	4,805,117		$	(1,357,896	)	$	4,124,198
Common stock issued for stock payable											200,000		20		(354,000	)		353,980			-			-
Common stock issued for services											200,000		20		-			283,980			-			284,000
Fair value of Options granted to Employees											-		-		-			573,548			-			573,548
Net loss for the three months ended 03/31/24					-				-		-		-		-			-			(1,710,004	)		(1,710,004	)
Balance, March 31, 2024		-			-		-		-		10,165,000		1,017		322,000			6,016,625			(3,067,900	)		3,271,742

Common stock issued for stock payable											-		-		154,500			-			-			154,500
Common stock issued for stock services											100,000		10		-			149,990			-			150,000
Net loss for the three months ended 06/30/24					-				-		-		-		-			-			(520,971	)		(520,971	)
Balance, June 30, 2024		-		$	-		-	$	-		10,265,000	$	1,027	$	476,500		$	6,166,615		$	(3,588,871	)	$	3,055,271
Shares issued for services from stock payable											150,000		15		(154,500	)		154,485			-			-
Stock issued for services to Related Party											250,000		25		-			202,475			-			202,500
Stock issued for asset purchase to Related Party											1,500,000		150		-			1,142,850			-			1,143,000
Net loss for the three months ended September 30, 2024					-				-		-		-		-			-			(1,128,872	)		(1,128,872	)
Balance, September 30, 2024		-		$	-		-	$	-		12,165,500	$	1,217	$	322,000		$	7,666,425		$	(4,717,743	)	$	3,271,899

Balance December 31, 2024		-		$	-		-	$	-		15,956,477	$	1,596	$	790,998		$	10,195,598		$	(5,697,241	)	$	5,290,951
Exercise of pre-funded warrants											712,133		71		(452,748	)		452,748			-			71
Common stock issued for investment in Gameverse											500,000		50		-			190,450			-			190,500
Stock issued for services											75,000		8		(16,250	)		44,387			-			28,145
Fair value of Options granted to Directors																		119,635			-			119,635
Net loss for the three months ended 03/31/25					-				-				-		-			-			(646,586	)		(646,586	)
Balance, March 31, 2025		-			-		-		-		17,243,610		1,725		322,000			11,002,818			(6,343,827	)		4,982,716
Series A Preferred stock issued in private placement		5,000			-													4,591,392						4,591,392
Series A Preferred stock conversion into common stock		(5,000	)		-						9,518,571		952											952
Series B preferred shares issued for fair value of tokens received in private placement							100,000		10									99,674,990						99,675,000
Exercise of options											645,000		64					343,943						344,007
Exercise of cashless warrants											18,802		2					(2	)					-
Fair value of Options granted to Directors																		341,186						341,186
Waiver of interest on related party Note																		41,877						41,877
Net income for the three months ended 06/30/25					-				-				-		-			-			1,467,855			1,467,855
Balance, June 30, 2025		-			-		100,000		10		27,425,983		2,743		322,000			115,996,204			(4,875,972	)		111,444,985
Balance		-			-		100,000		10		27,425,983		2,743		322,000			115,996,204			(4,875,972	)		111,444,985

Warrants exercised using cash											8,928,571		893					5,802,678						5,803,571
Stock options exercised for cash											625,000		62					351,938						352,000
Stock options exercised cashless											135,846		14					(14	)					-
Warrant exercised using tokens											220,000,000		22,000					109,978,000						110,000,000
Net income for the three months ended 09/30/25					-				-				-		-			-			12,174,266			12,174,266
Net income (loss)					-				-				-		-			-			12,174,266			12,174,266
Balance, September 30,		-		$	-		100,000	$	10		257,115,400	$	25,712	$	322,000		$	232,128,806		$	7,298,294		$	239,774,822
Balance		-		$	-		100,000	$	10		257,115,400	$	25,712	$	322,000		$	232,128,806		$	7,298,294		$	239,774,822

The accompanying notes are an integral part of these unaudited financial statements.

F-4

Table of Contents

Tron Inc.

Condensed Consolidated Statement of Cash Flows

For the Nine Months Ended September 30, 2025 and 2024

(unaudited)

	2025			2024
	Nine Months Ended September 30,
	2025			2024
Cash flows from operating activities:
Net Income (loss)	$	12,995,535		$	(3,359,847	)
Adjustment to reconcile net loss to operating activities
Unrealized gain on digital asset investment		(16,114,038	)		-
Unrealized income from staking activities		(2,303,539	)		-
Common stock issued for services		28,145			791,000
Fair value of Officer, Director and Employee options		460,821			573,548
Depreciation and amortization		176,132			36,154
Deferred tax expense		3,454,510
Changes in operating assets and liabilities:					-
Accounts receivable		262,855			162,846
Inventory		66,207			(536,875	)
Prepaid expenses		(178,792	)		111,664
Accounts payable		(47,785	)		562,833
Accrued expenses		208,224			(22,118	)
Other assets		(23,960	)		(286	)
Net cash provided by (used in) operating activities		(1,015,685	)		(1,681,081	)

Cash flows from investing activities:
Cash paid for fixed assets		-			(23,264	)
Cash paid for Intangible Assets to Related Party		-			(250,000	)
Cash flows (used in) investing activities		-			(273,264	)

Financing activities:
Private placement		4,592,344			-
Payment on promissory note		(500,000	)		-
Expenses related to sale of preferred stock		(325,000	)		-
Exercise of warrants using cash		5,803,571			-
Exercise of pre-funded warrants		71			-
Exercise of stock options		696,007			-
Cash (used in) financing activities		10,266,993			-

Net increase (decrease) in cash and cash equivalents		9,251,308			(1,954,345	)

Cash and cash equivalents at the beginning of the period		1,352,373			2,980,741

Cash and cash equivalents at the end of the period	$	10,603,681		$	1,026,396

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-		$	-
NON_CASH INFORMATION
Stock issued for Gameverse shares	$	190,500		$	-
Stock issued from Stock Payable – prefunded warrants	$	452,748		$	-
Waiver of accrued interest on related party note	$	41,877		$	-
Stock issued from Stock Payable	$	16,250		$	-
Cashless exercise of warrants	$	16		$	-
Fair value of preferred shares issued for digital assets	$	100,000,000		$	-
Warrant exercised for Common Stock using token	$	110,000,000		$	-
Promissory Note issued for intangible assets	$	-		$	1,500,000
Series A Preferred Stock conversion to common stock	$	952		$	-
Establish Right of Use asset and liability	$	753,564		$	-
Common stock issued for intangible assets	$	-		$	1,143,000

The accompanying notes are an integral part of these unaudited financial statements.

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Tron Inc.

Notes to Financial Statements

For the Three and Nine Months Ended September 30, 2025 and 2024

(Unaudited)

Note 1 - Organization and Business Operations

Tron Inc. (formerly SRM Entertainment, Inc.) is a Nevada corporation, listed and traded on NASDAQ, headquartered in Florida and was incorporated on April 22, 2022. SRM Entertainment Limited (“SRM Ltd”), a wholly-owned subsidiary, is a limited company incorporated in Hong Kong, on January 23, 1981. The consolidated Tron Inc. and SRM Ltd are collectively referred to as the Company.

The Company’s holding of TRON tokens (“TRX”) constitutes the largest public ownership of TRX tokens. Through SRM Ltd, our wholly owned subsidiary, the Company designs, develops, and manufactures custom merchandise which includes toys and souvenirs for the world’s largest theme parks and other entertainment venues.

Note 2 - Significant Accounting Policies

Basis of Presentation

The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of US Securities and Exchange Commission (“SEC”).

Emerging Growth Company Status

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

F-6

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Recent Issued Accounting Pronouncements

Segment Reporting

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, enhancing segment reporting requirements under ASC 280. This ASU aims to provide investors with more detailed information about a public entity’s reportable segments, including those with a single reportable segment. The Key Provisions include:

1. Enhanced Expense Disclosures: Public entities must now disclose significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included in each reported measure of segment profit or loss.

3. Disclosure of Other Segment Items: Entities are required to disclose an amount for “other segment items” by reportable segment, representing the difference between reported segment revenues and the sum of significant segment expenses and the reported measure of segment profit or loss. A qualitative description of the composition of these other segment items is also required. Interim Reporting Requirements: All annual disclosures about a reportable segment’s profit or loss and assets, including the new disclosures introduced by ASU 2023-07, must now be provided in interim periods as well.

4. Single Reportable Segment Entities: Public entities with a single reportable segment are explicitly required to provide all segment disclosures mandated by ASC 280, including those introduced by ASU 2023-07. This clarification ensures that users receive comprehensive information about the entity’s operations and performance.

5. Disclosure of CODM Information: Entities must disclose the title and position of the CODM and explain how the CODM uses the reported measure(s) of segment profit or loss in assessing performance and allocating resources.

These amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. The Company adopted the ASU for the year ended December 31, 2024.

Accounting for Crypto Assets

In December 2023, the FASB issued ASU 2023-08, Accounting for and Disclosure of Crypto Assets, which establishes accounting guidance for crypto assets meeting certain criteria. The Company holds crypto assets that meet the scope criteria of ASU 2023-08. The pronouncement requires crypto assets which meet the criteria to be recognized at fair value with changes recognized in net income each reporting period. ASU 2023-08 is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. The Company adopted ASU 2023-08, effective January 1, 2025.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all short-term investments with a maturity of three months or less when purchased to be cash and equivalents for purposes of the statement of cash flows. There were no cash equivalents as of September 30, 2025 and December 31, 2024.

Accounts Receivable and Credit Risk

Accounts receivable are generated from sales of the Company’s products. The Company provides an allowance for doubtful collections, which is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. For the nine months ended September 30, 2025 and year ended December 31, 2024, the Company did not recognize any allowance for doubtful collections

Inventory

Inventories will be stated at the lower of cost or market. The Company will periodically review the value of items in inventory and provides write-downs or write-offs of inventory based on its assessment of market conditions. Write-downs and write-offs are charged to cost of goods sold. Inventory is based upon the average cost method of accounting.

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Investments in Non-Marketable Equity Securities

Investments in non-marketable equity investments, including private company investments acquired through private placements, are accounted for using the alternative measurement under ASC 321. Under this method, investments are carried at cost, less any impairment, and adjusted for observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company assesses non-marketable equity investments for impairment when events or changes in circumstances indicate that the investment may be impaired. If the fair value of the investment is less than its carrying amount, an impairment loss is recognized in earnings.

Digital Assets Held in Treasury Wallet Set Up by an Affiliate – Treasury Holdings

Our Digital Assets consist of TRON tokens (“TRX”), as part of its treasury strategy, that meet the scope requirements of ASU 2023-08, Accounting for and Disclosure of Crypto Assets. The Company accounts for these assets at fair value in accordance with ASC 350-60 and ASC 820, with changes in fair value recognized in net income.

Digital Assets are classified as current or noncurrent in the consolidated balance sheet under ASC-210, based on the Company’s intended holding period and liquidity considerations. Assets expected to be sold or used within one year from the reporting date are classified as current assets. Treasury assets not intended to be sold or converted to cash within the operating cycle are classified as noncurrent assets.

Crypto assets are not offset against any related liabilities and are presented on a gross basis in the balance sheet, consistent with ASC 210-20, unless a legal right of setoff exists and settlement is intended to occur on a net basis.

Crypto assets that are subject to restrictions on transfer, such as assets locked in staking arrangements are separately disclosed.

The Company determines the fair value of crypto assets using quoted prices from active markets at the balance sheet date (Level 3 inputs under ASC 820).

Gains and losses resulting from changes in fair value are included in Other Income (Loss), net in the statement of operations.

The Company discloses the composition of crypto assets, including fair value by major type of token, as well as the location on the balance sheet and significant changes during the reporting period, in accordance with the disclosure requirements of ASU 2023-08.

Future sales or exchanges of coins will be accounted for on a first in first out basis (FIFO).

Fixed Assets and Other Assets

Fixed assets are stated at cost at the date of purchase. Depreciation is calculated using the straight-line method over the lesser of the estimated useful lives of the assets or the lease term.

The Company purchases molds for the manufacture of some of its products and are included in fixed assets at cost. Certain agreements call for the manufacturer to reimburse the Company for the cost of the molds upon first shipment of products produced using the molds. The costs of these molds are removed from fixed assets upon reimbursement. Molds that are not subject to reimbursement are depreciated when the products are in production.

Net Loss Per Share of Common Stock

Net income (loss) per share of Common Stock is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of Common Stock outstanding during the period. If applicable, diluted earnings per share assume the conversion, exercise or issuance of all Common Stock instruments such as options, warrants, convertible securities and preferred stock, unless the effect is to reduce a loss or increase earnings per share. As such, options, warrants, convertible securities, and preferred stock are not considered in the calculations for the 2024 fully diluted shares.

	2025		2024			2025		2024
	Three Months Ended September 30,					Nine Months Ended September 30,
	2025		2024			2025		2024

Numerator:
Net income (loss)	$	12,174,266	$	(1,128,872	)	$	12,995,535	$	(3,359,847	)

Denominator:
Denominator for basic earnings per share - Weighted-average of shares of Common Stock issued and outstanding during the period		110,045,018		10,581,558			48,948,051		10,389,770
Denominator for diluted earnings per share		317,763,232		10,581,558			256,666,265		10,389,770

Net income (loss) per share
Basic	$	0.11	$	(0.11	)	$	0.27	$	(0.32	)
Diluted	$	0.04	$	(0.11	)	$	0.05	$	(0.32	)

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature.

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Revenue Recognition

SRM Ltd will generate its revenue from the sale of its products directly to the end user (the “customer”).

The Company recognizes revenues by applying the following steps in accordance with FASB Accounting Standards Codification 606 “Revenue from Contracts with Customers” (“ASC 606”). Under ASC 606, revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

●

identify the contract with a customer;

●

identify the performance obligations in the contract;

●

determine the transaction price;

●

allocate the transaction price to performance obligations in the contract; and

●

recognize revenue as the performance obligation is satisfied.

The Company’s performance obligations are satisfied when goods or products are shipped on a FOB shipping point basis as title passes when shipped. Our products are generally paid in advance of shipment or standard net 30 days and we offer no specific right of return, refund or warranty related to our products except for cases of defective products of which there have been none to date.

TRX Staking

The Company engages primarily in liquid staking activities with JustLend DAO (“JustLend”), whereby it locks its digital assets (TRX tokens) in the JustLend protocol to support network operations and, in return, accrued network rewards. The Company received Staked TRX tokens (“sTRX”) in return for staking TRX. sTRX represents a tokenized version of TRX. These activities do not involve a contract with a customer and therefore are outside the scope of ASC 606, Revenue from Contracts with Customers.

The sTRX token does not generate discrete staking rewards. Instead, the economic benefit of staking is reflected through a floating conversion rate between TRX and sTRX, which increases over time based on accrued protocol rewards.

The Company accounts for sTRX as a digital asset and measures it at fair value, with changes in fair value recognized in the statement of operations as unrealized gains or losses. Because staking rewards are embedded in the appreciation of sTRX, the Company does not recognize separate staking income until the sTRX is redeemed or disposed of. Any increase in value attributable to staking activity is considered unrealized staking income recorded at fair value.

Foreign Currency Translation

Assets and liabilities in foreign currencies are translated using the exchange rate at the balance sheet date, while revenue and expense accounts are translated at the average exchange rates prevailing during the period. Equity accounts are translated at historical exchange rates. Gains and losses from foreign currency transactions and translation for the nine months ended September 30, 2025 and the year ended December 31, 2024 and the cumulative translation gains and losses as of September 30, 2025 and December 31 2024 were not material.

Stock Based Compensation

The Company recognizes compensation costs to employees under FASB Accounting Standards Codification 718 “Compensation - Stock Compensation” (“ASC 718”). Under ASC 718, companies are required to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share based compensation arrangements include stock options and warrants. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.

The Company has adopted ASU No. 2018-07 “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” These amendments expand the scope of Topic 718, Compensation - Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to non-employees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned.

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Income Taxes

The Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements. The Company believes that its income tax positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in a material changes to its financial position. The Company’s policy for recording interest and penalties associated with audits is to record such items as a component of income tax expense.

Segment Reporting

The Company operates as a single reportable segment. The Chief Operating Decision Maker (CODM) (our CEO, Richard Miller) reviews the financial performance of the company on a consolidated basis and makes decisions regarding resource allocation at that level. The CODM has determined that all of the revenue, costs and expenses are attributable to the Company’s principal business with the exception of certain general and administrative expenses related to being a public company. As a result, the company has determined that it operates two operating segments in accordance with Accounting Standards Codification (ASC) 280, Segment Reporting. The Company’s business are (i) the design, manufacture, and sale of toys to premier theme parks. Revenues from external customers are derived from e-commerce, distributors, and direct to retail consumers and (ii) a Digital Asset Treasury Strategy using TRX tokens.

Related parties

The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

Pursuant to Section 850-10-20 the related parties include a. affiliates of the Company; b. entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c. trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d. principal owners of the Company; e. management of the Company; f. other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g. other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of combined financial statements is not required in those statements. The disclosures shall include: a. the nature of the relationship(s) involved; b. a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c. the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d. amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

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Note 3 – Inventory

At September 30, 2025 and December 31, 2024, the Company had inventory of finished goods of $717,593 and $783,800, respectively.

SEC Form 10-Q filed by Tron Inc.